Caribbean Integration from Crisis to Transformation and Repositioning

By Kenneth Hall and Myrtle Chuck-A-San

This collection entitled Caribbean Integration: From Crisis to Transformation and Repositioning, captures the thinking of and prescriptions offered by some of the best minds of the Caribbean and further afield at a Conference held at The University of the West Indies in 2011 under the theme The Caribbean and the Commonwealth: Collective Responsibility for the 21st Century.

In examining the challenges faced by the Region in moving the Integration process forward, a number of papers boldly assess what needs to be done to avert the crisis which threatened the Caribbean as they advocate for a rethinking of the strategies currently employed by the Caribbean Community.
This book is highly recommended to senior policy makers, serious academicians and a public deeply interested in the challenges and triumphs of the Caribbean peoples.

• Language: English
• Publisher: Trafford Publishing
• Release date: Oct 1, 2012
• ISBN: 9781466944046

Kenneth Hall

Professor Sir Kenneth Hall is a statesman, academic, prolific writer and advocate of the Caribbean Integration Movement. He served as Pro-Chancellor and Principal of the University of the West Indies, Mona, and earlier as Deputy Secretary-General of the Caribbean Community Secretariat. During the 10 years, he spent at UWI (1996-2006) He has been credited for the implementation of several policies which lead to a significant transformation in academic programmes, physical infrastructure and student relations on the Campus. As a prolific writer, Professor Sir Kenneth Hall has authored and edited a plethora of works including. The Caribbean Community in Transition, Maritime and Border Issues in CARICOM, Production Integration in CARICOM: From Theory to Action. He was appointed Governor-General of Jamaica in 2016 where he used his office to build a national consensus on issues such as youth and education. Myrtle Veronica Chuck-A-Sang is the Managing Director of the INTEGRATIONIST. she served as Director of the National Accreditation Council, Guyana. Formerly the Project Director of the UWI-CARICOM she has produced a Skills Assessment study of key human resources available within the partner institutions. Myrtle Chuck-A-sang has co-edited with Professor Sir Kenneth Hall, more than forty books on a range of issues of regional significance and is one of the executive producers of a defining documentary on Caribbean Integration as well as the editor of the Integration Quarterly. She served for several decades with the CARICOM Secretariat in various capacities and was responsible for establishing and managing the Conference Support Services and later the Administrative Services Programme. Mrs. Myrtle Chuck-A-Sang is the Managing Director of the Integrationist established in Georgetown, Guyana in 2011. In 2000 she was appointed to manage the UWI-CARICOM Institutional Relations Project. Over the ten years of its existence, quite apart from discharging the responsibilities of managing this Project including the preparation of a Skills Assessment Report, Mrs. Chuck-A-Sang collaborated with Professor Sir Kenneth Hall to edit more than forty books on a wide range of issues of significance to the Governments, private sector organisations, trade unions, tertiary institutions, secondary schools, commentators, and the ordinary people of the Caribbean region. These publications include Caribbean Challenges and Opportunities: The Diplomacy of Market Access, The CSME: Genesis and Prognosis, Coping with the Collapse of the Old Order: CARICOM’s New External Agenda, The Caribbean Community in Transition: Functional Cooperation a Catalyst for Change and more recently, Caribbean Integration: From Crisis to Transformation and Repositioning and Economic Transformation and Job Creation: The Caribbean Experience, together with papers published by the UWI-CARICOM Project, have been utilized by scholars and other prominent officials in their writings and analyses of the politics of regional integration to make a significant contribution to reviving and reshaping the debate on the direction and purpose of the Caribbean Integration process. Mrs. Chuck-A-Sang served for almost four decades at various levels of the Caribbean Community Secretariat, testimony to her personal as well as professional commitment to the principle of integration generally and Caribbean integration in particular. During this time, she was responsible for establishing and managing the Conference Support services, and, later, the Administrative Services programme, the largest programme area in the Secretariat. Before she served at CARICOM, Mrs. Chuck-A-Sang held administrative and strategic positions at the government and private sector levels, which afforded her invaluable insights into, and understanding of arbitration procedures, labour negotiations, governance arrangements, parliamentary affairs and diplomacy, an experience which stood her in good stead as she became more immersed in the world of work. Mrs. Chuck-A-Sang is one of the Executive producers of a defining documentary on Caribbean Integration entitled “Integrate or Perish” and the only known dictionary of Caribbean Acronyms and Abbreviations. She created the Caribbean Fellowship Inc. as the patron company of the first and only visit by the highly acclaimed University Singers to Guyana and the CARICOM Secretariat, in 2002, a visit which is still a source of fond reminiscence to this day. So, to her credit is the “The Integrationist Quarterly”, a journal especially designed to showcase the creative writings of the youth of the Caribbean, and more recently a Caribbean Research Hub with the capacity to meet the expectations of committed researchers, policymakers and academics. Before service with the CARICOM Secretariat, Mrs. Chuck-A-Sang held administrative and strategic positions with the Government and private sectors of Guyana positions which afforded her invaluable insights into and understanding of arbitration procedures, labour negotiations, governance arrangements, parliamentary affairs and diplomatic experience which stood her in good stead as she became more immersed in the world of work. Mrs. Myrtle Chuck-A-Sang, a Guyanese, holds a BA degree (Hons) in Political Science and Communications from New York State University (SUNY) Oswego and an MA degree in Organisational Communications from the State University of New York SUNY at ALBANY.

Book preview

© Copyright 2012 The Integrationist.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the written prior permission of the author.

Editors:

The Most Hon. Professor Sir Kenneth O. Hall, O.N, G.C.M.G, O.J, Ph.D

    Honorary Distinguished Research Fellow, University of the West Indies

Myrtle Chuck-A-Sang, M.A.

    Editor and Managing Director, The Integrationist

    Editor-in-Chief, Integration Quarterly

    Company Secretary, Caribbean Fellowship Inc.

All correspondence should be addressed to the: Editor, The Integrationist, 10 North Road, Bourda, Georgetown, Guyana. Email: [e-mail] Telephone: [phone]

Websites:    www.theintegrationistcaribbean.org

www.theintegrationist.org

isbn: 978-1-4669-4403-9 (sc)

isbn: 978-1-4669-4404-6 (e)

Trafford rev. 09/21/2012

7-Copyright-Trafford_Logo.ai

www.trafford.com

North America & international

toll-free: 1 888 232 4444 (USA & Canada)

phone: [phone].png fax: [phone]

Contents

Preface

PART ONE

OVERCOMING

THE DEVELOPMENT DEFICITS:

A CRISIS OF REGIONAL INTEGRATION

CHAPTER 1      The University of the West

Indies Mona Appeal

CHAPTER 2      Four Questions for Regional Integration

CHAPTER 3      Future Focus: A New Diplomacy for Market Access

PART TWO

A TRANSFORMATION AGENDA

CHAPTER 4      Public-Private Partnerships for Regional Development: A Necessary Development Strategy

CHAPTER 5      Health, Ageing and Demographic Change: Can We Make a Difference?

CHAPTER 6      Building Flexibility in Human Resource Development in CARICOM

CHAPTER 7      Economic Recovery within the Framework of CARICOM

CHAPTER 8      West Indian Politics and Government on Their Own Terms: 1625 to 2011 and Beyond

CHAPTER 9      Corruption and Governance, Institutions and Response: Counting the Cost of Development.

CHAPTER 10      Cultural Industries and Small Developing States in the Context of Globalisation: An Agenda for the Caribbean

PART THREE

REPOSITIONING THE CARIBBEAN

IN THE NEW GLOBAL ENVIRONMENT

CHAPTER 11      New Focus of International Organisations and the Implications for the Caribbean

CHAPTER 12      Harnessing Commonwealth Trade Ties

CHAPTER 13      Caribbean Integration and Global Europe: Implications of the EPA for the CSME

CHAPTER 14      Redesigning Strategy for Caribbean Success in the age of Globalization

CHAPTER 15      The Security Threat in the Contemporary Caribbean: Challenges and Responses

Chapter 16      Response to a Changing Climate: A Clearer and Cleaner Vision

CHAPTER 17      Global Trade Relations and Developing Countries: Immediate Challenges for Caribbean Countries*

CHAPTER 18      Energy: Caribbean Conundrum

Chapter 19      What’s in your wallet? United States or Caribbean Dollars?

CHAPTER 20      Condationalities of Market Access

CHAPTER 21      Elements of a Growth Strategy for the Caribbean Region

CHAPTER 22      Globalisation and its Financialisation: What Can the Experiences of the British Caribbean Colonial Exchange Standard Teach Us?*

Preface

Our Community desperately needs a flow of oxygen to keep it alive, so said the Rt. Hon. Percival J. Patterson at the conclusion of a Conference on The Caribbean and the Commonwealth: Collective Responsibility for the 21st Century, which was held at the University of the West Indies, Mona Campus, in February 2011. The former Prime Minister of Jamaica issued an appeal for a renewed and unwavering commitment to regionalism by the region’s leadership failing which, he cautioned, everything else would be undermined, under-resourced and ineffective. He shared the ongoing concern and perplexity of many of the Conference participants regarding the future of the Caribbean Community when he noted that although no one appeared to have set out to destroy CARICOM it was nevertheless in deep crisis.

This collective view of the Conference, which included among its participants political, social and economic experts, senior academics of the University of the West Indies as well as devotees to the cause of regional integration, had inspired the immediate drafting of an open letter to the Heads of State and Government of the Caribbean Community who were scheduled to meet later that month in Grenada. Called the Mona Appeal it noted inter alia that the Conference looked to the forthcoming Grenada Heads of Government Meeting for positive action to address CARICOM’s decline and for a return to the spirit of regionalism that inspired its highest moments of achievement. The Conference was of the view that it was time for faith in the onward march of Caribbean civilization and for progressive, enlightened and courageous action by a united region strengthened by that self-belief.

The records do not indicate whether the Mona Appeal was extensively discussed rather than simply noted by the Heads of Government at their Inter-Sessional Meeting in Grenada. What emerged from that Meeting however was a declaration by the region’s leaders to convene a Special Retreat to discuss this very concern although couched in somewhat more diplomatic language, to wit:

to continue their discussions on Prioritising the Focus and Direction of the Community which they initiated at their Twenty-Second Inter-Sessional Meeting held in Grenada in February 2011.

At the conclusion of that Retreat, and reportedly after more than a day of intensive discussions, the regional leaders (unfortunately illustrative of the deep problems is the fact that not all Heads of Government were in attendance at the retreat) issued a Communiqué which in effect acknowledged that the regional integration process and specifically one of its principal engines—the Single Market—needed more time in recognition of the fact that the process towards full implementation would take longer than anticipated; agreed to postpone the appointment of a new Secretary-General until July 2011, and posited that the current review of the CARICOM Secretariat should take into account the strengthening of the institution to enable it inter alia to plan an enhanced role in the area of mobilizing substantial resources for concrete projects in the areas identified.

In effect after serious back to back deliberations, first in Grenada then in Guyana, the regional integration process, as one journalist¹ cynically wrote, was put on pause. To put it more starkly it was clear confirmation that some serious infusion of oxygen had become critically necessary to ensure the region’s survival. After almost four decades of Community activity for reform which included a major overhaul of the constituent Treaty of Chaguaramas and several reviews each of which, like the West Indian Commission, acknowledged that it was a time for action, we—the proponents of and advocates for regional integration—appear to be no nearer to marking our balance sheet on the side of progress towards the realization of a viable and effective Caribbean Community. This is not due for want of a significant mass of responsible elites in the region who have, over many decades, advocated the cause of CARICOM. This collection of essays, along with other publications by The Integrationist and others, gives ample testimony of that.

We continue to express the imperative for a regional integration process based for the most part on the quite valid premise that, in the world of the 20th Century and increasingly in this Century, the States of the Community need to work as one if they are to survive the challenges of aggressive and powerful forces emanating from various communities beyond our shores. We continually also do so based on the perhaps not so valid assumption that it is historically and culturally natural for us to think and act as one Community.

Regrettably this is not so. Such thinking is both an illusion and a delusion that has influenced and governed our actions for nearly four decades as a Community. Examples abound which demonstrate how such thinking has influenced our action. When for example the organizers of the Conference referred to earlier decided on its theme, there was the implied assumption that there existed a reasonably strong and viable Caribbean Community which over the years had developed the capacity and indeed the experience of success to enable it to speak of a responsibility which it had acquired and which enabled it to make a positive contribution to the further development and consolidation of the Commonwealth as a powerful active voice in the determination of international events. The thought process in arriving at the Conference theme bespoke of an ambition that should have been made of sterner stuff—or at least should have taken more fully into account the realities of the Caribbean integration process as it has evolved to date.

Indeed the Conference was no more than a presentation or two old before it became clear from the discussions that CARICOM needed to put itself in order before it could with any serious justification lay claim to such an exemplar role. In his Opening Address to the Conference, the Prime Minister of Grenada in his capacity as the current Chairman of the Conference of Heads of Government of the Caribbean Community highlighted prevailing concerns about the state of the regional integration process. It was a concern, he asserted, that was widely felt by the people of the Caribbean Community and he urged that the time had come to cease dealing with lofty abstractions and to provide practical answers to pressing realities. His address also inspired and gave substance to the Mona Appeal that was issued at the conclusion of the Conference and addressed to the Heads of Government of the Caribbean Community meeting later that month in Grenada.

It should come as no surprise that neither the Inter-Sessional Meeting in Grenada, nor the Special Retreat in Guyana a few months later convened for the purpose of finding ways and means to re-energise the CARICOM integration process, did not produce much more than a repetition of previous assertions of commitment and intent. Old prescriptions unproductive of results in the past are unlikely to be any more productive in the future. Perhaps the time has come to rethink the entire premise upon which the integration movement has been founded and with it the implied assumption that there was a pre-existing Community which only needed strengthening.

Kirk Meighoo, for instance, has produced an interesting Paper in this context entitled: West Indian Politics and Government on their own Terms (1625-2011 and beyond). He has traced the development of government and governance in the various Caribbean territories beginning with the grant of a Charter to the Earl of Carlisle in 1625. What the region has inherited and developed was what he describes as a system, both practical and psychological, which he terms Proprietorship, following the original commissions. The Governors, under the various sub-charters issued by the Earl of Carlisle, were empowered to make laws, to tax and exact rents, govern either in person or by deputies, and they could execute justice, remit offences and grant pardons. Each had the authority to organize military defence and make full use of martial law in times of crisis. All legislative, executive, judicial and military authority was centered in the person of the Governor exercisable, where applicable or deemed expedient, through his deputies. Meighoo concludes that the West Indian system of Government, far from being a mirror of a Westminster form of Government, was historically premised on the integration rather than on a separation of powers; and it spawned a leadership culture that was authoritarian of itself and in the exercise of power, with notable periods of shifts of authority to popular assemblies, which however have so far always been taken back to the Governor-centred system.

Meighoo’s account is interesting in today’s context, for taken to its logical conclusion, it describes the West Indian leaders over the past five decades during which Member States of the Caribbean Community became self-governing and independent. In many respects it was an easy road and not the struggle for independence that characterized the journey to independent status for India and many African States that had been colonies within the British Empire. The Montego Bay Conference of 1947 that set the stage for the West Indies Federation a decade later was dominated by the struggle to determine what should be the structure of the proposed federal entity. There was no dispute between the British Government and the region’s leaders about whether or not there should be a federation among the territories. All were agreed that the West Indies could not survive as self-governing independent states given their physical size and lack of sustainable economic viability.

An examination of the many pre-federation, regional integration conferences beginning from early in the 20th century shows that the significant impetus for internal self-government, in all its several manifestations, was the desire of the ruling planter class to have an increasing share in controlling and wielding local power. The practical and psychological impact of proprietorship has conditioned the minds and actions of our leadership culture in a way that has set the stage, if not already cast in stone, for a region that will remain inherently fragmented. This is a division of an insidious kind for it is not born of enmity nor competing interests nor is it blind to the virtues of integration. But it will certainly continue to plague our efforts at integration unless and until we face up to the reality that our oneness needs to be regarded primarily as an opportunity, the existence of which cannot simply be assumed and left to be developed by chance. Anthony Payne (Political History of CARICOM) sums it up nicely when he says that regional activity, eye catching though it may have been, has been an essentially superficial phenomenon when set against a back-cloth on which there has always been depicted severe political and economic fragmentation.

Sir John Mordecai in his penetrating analysis of the failed federal experiment (The West Indies: The Federal Negotiations)² has left us with little doubt that national self-interest, as prevalent then as it is today, was the dominating factor in the federal negotiations and a contributing factor to the failure of the federal experiments by the beginning of the 1950s. Virtually all the territories that were to comprise the federation were advancing in various stages towards self-government which essentially meant the transfer of proprietorship power into local hands. In addition both Jamaica and Trinidad were beginning to experience strong economic growth mainly through the process that became known as industrialization by invitation, and some of the other territories were also doing well largely as a result of arrangements made for high and guaranteed prices for sugar, bananas and bauxite. The impetus for self-government was clearly, seen now in hindsight, a factor that was operating not in favour of Federation but towards undermining it.

Sir Shridath Ramphal gave an address earlier this year in Grenada in honour of Sir Archibald Nedd, included in this volume. He interestingly enough entitled it: Is the West Indies West Indian? For many of us the answer is in the affirmative and we have based our actions over the years on this assumption. But nearly one hundred years after the great T.A. Marryshaw, the pre-eminent regional integrationist, we are still asking the question and wondering why this sense of uniting as a people has not been sufficiently recognized and internalized. In his lecture Sir Shridath made this point:

The West Indies cannot be West Indian if West Indian Affairs, regional matters, are not the unwritten premise of every Government’s agenda; not occasionally, but always; not as ad hoc problems, but as the basic environment of policy. It is not so now.

And why is it not so now? Clearly the traditional answers will not suffice and we may have to look inward to understand better how and where to seek solutions.

Two decades ago a region wide search for answers was undertaken. A Time For Action, the Report by the West Indian Commission that undertook the study remains today perhaps the best comprehensive analysis of what to do for the Caribbean Community to move forward as a regionally integrated entity. Fundamental to all the prescriptions put forward then, and indeed subsequently, was the imperative not to assume that something called a regional consciousness existed but to take steps to actively create one and ensure its sustainability and growth. The West Indian Commission spoke to the people of the region and they responded. They wanted a system that put their interests first; they wanted a space to develop and in which to ensure their economic and social growth; they wanted security; they wanted to feel a part of and believe in given symbols of regional unity and so develop pride in being a West Indian. And above all they wanted to be an integral part of the process through mechanisms and actions that were unlike in the previous four to five decades of independence where power remained in the hands of the ruling elite. The West Indian Commission did not go this far. The prescribed agent for change was not a call for a political and psychological upheaval within our society but for the more traditionalist approach of thinking within the current leadership mechanisms. We therefore continue to appeal to the very people, our leaders, who historically, culturally and psychologically are not by definition predisposed to relinquish or engage in any significant sharing of their power.

In his Paper on Our Caribbean Civilization and its Political Prospects, Prime Minister Gonsalves put it differently. It makes little sense, he wrote, for us to proceed in fits and starts in the regional integration movement and dump into the CARICOM and OECS Secretariats a host of functional cooperation tasks without the means or the political super structure to match. Integration has never and will never be a series of technical functions. It is a profoundly political exercise. It is apposite to add that in both of the above commentaries on the prescriptions for change, neither the sub-theme of Meighoo’s proprietorship nor the call for people power inherent in the Time for Action is yet to be fully explored.

This publication Overcoming Development Deficits: A Crisis of Regional Integration has been divided into three parts. The second part addresses what is described as a Transformation Agenda. The question therefore is What really needs to be done now to avert the crisis and move the integration process forward. Do we, the leaders and the people of the region, possess the political will and readiness to go beyond the parameters of the individual nation state and embrace a union deeper than that which currently exists? It is a question posed by Prime Minister Gonsalves but it evokes considerable resonance among all of us especially when coupled with the other two questions put forward in his Paper referred to earlier:

(i) What is the most advanced model of regional integration that the political market, nationally, can bear?;

(ii) What is to be done right now to construct or prepare for the construction of a deeper union between CARICOM countries or at least between those which are ready and determined to go forward?

An obvious and indeed traditional place to start this transformative review would be in the hallowed walls of Heads of Government Conferences. There we would expect our leaders to come up with and implement solutions designed to move the regional integration process forward. The most recent example of the efficacy of this approach was their deliberations at the recently concluded Special Retreat in Guyana. Before them was a Paper entitled: Re-energising CARICOM Integration presented by the Chairman of the Conference of Heads of Government of the Caribbean Community, Prime Minister Tillman Thomas of Grenada, a draft of which had been prepared for him by a group of experts in the field of regional integration.

The experts’ draft Paper dealt with the issue of Governance and called for a mechanism that would create a legal basis for the implementation of CARICOM decisions. Under this rubric it also reflected the need for effective management of the CARICOM Secretariat. The Paper also addressed the imperative to prioritise the benefits of economic integration and to focus on such issues as a regional agricultural and food security programme, a regional maritime transport service and a renewable energy production programme. In all of this a specific role was carved out for the Private Sector. Of special significance was the emphasis which the Paper placed on the free movement of Community nationals and it put forward several recommendations to fast track the process. And, last but not least, it called for the mobilization of Civil Society in support of regional integration.

Although the Communiqué that was issued at the end of the Retreat made no direct mention of the Chairman’s Paper, it has to be assumed that the issues mentioned and others relating thereto must have been fully discussed by the Heads of Government. In addition the Papers in this Publication cover virtually every aspect of what in the opinion of our regional experts needs to be done to oxygenate a Community in crisis. These make interesting reading and their prescriptions for change are quite valid. There is no shortage of ideas and no shortage of solutions, both reasonable and viable, for taking the region forward as a cohesive unit.

Then, why are we still talking about a Community in crisis, re-energising the CARICOM integration process and in the recent language of our region’s leaders seeking greater focus on prosperity for our people?. The answer lies in the widely and freely acknowledged fact that the implementation process with respect to significant decisions taken in the interest of the Community as a whole falls woefully short of acceptable. Those, who over the years since the Treaty of Chaguaramas was signed, took bold and imaginative decisions to strengthen the Community and advance the integration process, were themselves historically, culturally and psychologically hapless when called upon to put them into effect.

Is the regional integration process therefore doomed to fail is a question the full impact of which, with respect to both the immediate and the long term consequences, should challenge us to rethink our current strategies. Failure is not an option that we should countenance with any degree of equanimity. In this regard two complementary strategies present themselves as logical options. The first is to work within the proprietorship context and focus attention on those areas of regional benefit where there is no diminution of the sovereignty exercisable by individual Member States. This is already being successfully done in such areas as health and education, and the field of regional cooperation can and indeed must be expanded if significant progress towards the realization of full regional integration is to be made. The Papers in this Publication deal with some of these areas in which there should be no impediment to the Community moving purposefully forward towards becoming a politically, economically and socially viable, cohesive entity.

The second strategy is to energise the power of the citizens of the Community both in challenging and complementing the authority of Governments. One assumes that Brian Meekes had something like this in mind when he wrote in his Paper on Caribbean Future that the first five decades of independence placed power in the hands of the ruling party—the next must place power decisively in the hands of the people.

Notes

¹ Singh, Rickey (2011, June 11). Dark Season for CARICOM as Regional Integration on pause. Trinidad Express.

² Mordecai, John (1968). The West Indies: The Federal Negotiations. Allen and Unwin

PART ONE

OVERCOMING

THE DEVELOPMENT DEFICITS:

A CRISIS OF REGIONAL INTEGRATION

CHAPTER 1

The University of the West

Indies Mona Appeal

The University of the West Indies hosted a Conference at its Mona Campus from 16-18 February, 2011 on ‘The Caribbean Community and the Commonwealth: Collective Responsibility for the 21st Century’. The Conference was declared open by the Hon. Tillman Thomas, Prime Minister of Grenada and Chairman of the Caribbean Community.

Discussions took place against the backdrop of the rapidly changing international environment, including the recent global economic crisis which has had a negative impact on the economies of the region. These discussions focused on the capacity of the Caribbean Community to assess the emerging global trends with a view to determining and taking the most effective actions that would ensure a sustainable pattern of economic and social development for the region and its peoples. The participants fully recognized that the region itself was facing many serious challenges to its survival. They were however convinced that, as a community of states committed to the concept of a region moving together, these challenges could be overcome.

They were further convinced that in order to respond effectively to these challenges, the Community will need to quicken the pace of regional integration as a strategy for optimizing the development possibilities of the region and to put in place appropriate regional governance arrangements to ensure the effective and timely implementation of agreements adopted in pursuance of the goals of the CARICOM Single Market and Economy (CSME).

Ideally, the Community will need to commit itself to the implementation within the next two years, of a number of priority measures, including the adoption of a strategic plan for regional development, the promotion of joint production arrangements, the free movement of people and the establishment of an effective system of regional governance to facilitate the implementation of agreed decisions. Failure to do so will not only increase the implementation deficit within the Community and thus hinder an improvement in the lives of the people of the region, but will also lead to a loss of credibility in the leadership of the Community, and thus negatively impact the integration enterprise.

It was against this background that the participants, despite their concern at the slow pace of the regional integration movement, urged that the Community should not allow itself to be discouraged by the often expressed views that CARICOM was in crisis. They urged instead that the region should be viewed as being at the crossroads of opportunity. It was with this perspective that they addressed issues as the integrative benefits of functional cooperation; the imperative to address immediately the pressing concerns of governance and with it the related question of institutional development; and the all important issue of ensuring the amelioration and sustainability of the quality of life of the Community’s citizens through focused people-centered development programmes.

The Conference drew inspiration from the Address of Prime Minister Thomas who highlighted prevailing concerns about the state of our integration process . . . widely felt by the people of CARICOM urging that this is not a time for lofty abstractions but for practical answers to pressing realities.

The Conference shared Prime Minister Thomas’ sense of the dangers facing CARICOM and joined in deploring the failure of the integration process to fulfill the aspirations and the commitments of the region’s political leadership. It recognized that these failures had led to dismay and disquiet among Caribbean people. The Conference believed that it was now a matter of the highest priority that CARICOM’s leadership at all levels should acknowledge these failures and the urgency of arresting the associated regional decline. The most urgent need was now for broad decision-making; it was for implementing decisions already made and embodied in the Revised Treaty of Chaguaramas and living by the spirit of unity and collective action that inspired the Grand Anse Declaration which preceded it.

The Conference looked to the forthcoming Grenada Heads of Government Meeting for positive action to address CARICOM’s decline and for a return to the spirit of regionalism that inspired its highest moments of achievement. It was of the view that it is time for faith in the onward march of Caribbean civilization and for progressive, enlightened and courageous action by a united region strengthened by that self-belief.

The Conference was not unmindful of the fact that the leadership being called for should not be restricted to the political leadership, who were themselves pre-occupied by the demands of national imperatives for survival and development, and who needed the support of other institutions in advancing the cause of regional development and integration. They therefore took note of and endorsed the essential role to be played by other actors in the development process, including the private sector, the labour movement and civil society. In this context they emphasized that the University of the West Indies had a continuing duty and responsibility to play a seminal role in contributing to the regional Integration process, and urged that this should form the cornerstone of the University’s upcoming strategic plan.

The Conference was unanimous in its appreciation of the support which it received from the Commonwealth Secretariat in making the deliberations possible. A strong and viable Caribbean Community would be even better positioned to advance the principles and objectives of the Commonwealth.

CHAPTER 2

Four Questions for Regional Integration

Norman Girvan

During the last two years I have been involved in an exercise to help in the preparation of a Single Development Vision for the Caribbean Community and an implementation road map for the completion of the Single Economy. This provided an opportunity to reflect on some of the issues facing the CARICOM Single Market and Economy (CSME) project. These reflections are organised in the form of four questions/sets of issues:

1. What are the limitations of an economic integration project that relies mainly on the operation of market mechanisms to achieve its goals?

2. What are the limitations of an integration project that is concerned mainly with the economic aspect of integration?

3. What are the limitations of an integration project which attempts to achieve its objectives mainly through the inter-governmental mode of cooperation?

4. What are the limitations of an integration project that is undertaken mainly in response to external pressure?

Question 1: What are the limitations of an economic integration project that relies mainly on the operation of market mechanisms to achieve its goals?

The CSME was designed on the principle of ‘Open Regionalism’ where market integration would take place simultaneously with opening the economies to the Rest of the World. It is a fairly advanced form of integration in that free movement of goods and services is to be accompanied by free movement of factors of production and a common or at least harmonized policy environment. The creation of a single economic space is meant to serve as a basis for ramping up exports to extra-regional markets as a result of improvements in allocative efficiency due to integration of factor markets, formation of regional firms, and attraction of foreign investment. It is not generally appreciated that the appropriate measures of the impact and benefits of the CSME are the growth of intra-Caribbean investment and foreign investment, labour flows and service provision and ultimately of exports to extra-regional markets. To focus exclusively on intra-regional trade in goods runs the risk of missing the point.

From this point of view the CSME is very much still a work in progress. The legal and institutional framework has been established as a result of a long and somewhat cumbersome process. The customs union, free movement of goods, services, capital and certain categories of skilled labour exists in law but there are several exceptions and derogations, and many administrative issues to be resolved, before we can say that they are really in effect. Anyone who has tried to move, work, or set up a business in another state can tell you that what exists on paper is one thing and that what exists in practice is another; and that politicians say one thing while officials do their own thing. Here are some issues regarding the movement of labour, service providers and capital.

A decision has been taken to extend the five eligible categories of university graduates, artists, cultural workers, media workers and sportspersons to teachers, nurses, and domestic workers. In theory, self-employed service providers are also eligible to seek work in all member states. The categories so entitled number in the hundreds of thousands in member states. However, there are major hurdles to be overcome: issues of certification of the eligible categories; issues of entitlement to and the availability of, housing, education, health and social benefits in receiving countries. There are concerns about security and drug trafficking and the spread of epidemic diseases such as HIV/AIDs. There is the matter of contingent rights of dependants. These issues need to be addressed as a matter of urgency and appropriate arrangements to be set in place if they are not to become a source of frustration and/or tension within the Community.

Free movement of capital

Turning to the movement of financial capital, this is entangled in the issue of monetary union and exchange rate regime. Barbados maintains restrictions on the outward movement of capital, which must also act as a deterrent to inward movement. Barbados committed itself to removing these restrictions by the end of 2007; but it must be recognised that capital controls has been one of the key instruments in the maintenance of that country’s fixed exchange rate, which in turn is one of the foundations of the social contract, which in turn underlies the maintenance of Barbados’s international competitiveness and its continuing ability to attract both domestic and foreign investment. To remove this element in the interest of free intra-regional movement will create an additional potential source of pressure on the exchange rate and increase the vulnerability of the economy to the effects of short-term capital movements or financial shocks. An additional burden of responsibility for exchange rate stability will be placed on fiscal and monetary management. This is already the case, of course, but it is a matter of degree. One might even question whether a fixed exchange rate regime is feasible in the absence of some degree of capital controls.

Another option for a country in Barbados’s position is to explore the feasibility of freeing capital movement between itself and other members of the Community while maintaining capital such controls with the rest of the world. In theory this is what Barbados proposes to do. But practice this is going to be difficult for any one country to achieve because of the fungibility of financial capital. On the other hand it should be possible collectively in the context of a regional currency union with a regional monetary authority which administers capital controls between the Community and the rest of the world. Hence, the existence of a common regional currency would probably be the most important single step to give practical effect to the free intra-regional movement of capital. The case for capital controls in this context turns very much on the case for a fixed exchange rate regime for the region as a whole, or at least a managed adjustable exchange rate; that is, not leaving the exchange rate to the so-called free play of market forces. A free exchange rate exposes the economy to sudden destabilising movements of short-term capital that have little to do with underling economic conditions and much to do with market psychology and the herd effect.

I am a firm believer in such a regime for the region. The experience of currency liberalisation in countries like Jamaica and Guyana has in my opinion been nothing less than disastrous. It is true of course that these disasters have as much or more to do with poor fiscal and monetary management prior to liberalisation as with liberalisation itself. The informal exchange market had become so huge that the authorities had no choice but to legalise it. However I wonder whether there are any economists prepared to argue that currency liberalisation in Jamaica and Guyana has had benign effects, in the form of the textbook neo-liberal expectations of increased capital inflows, increased international competitiveness, increased exports and higher growth; as distinct from merely bringing some order to the disorder that existed before. Liberalisation has made fiscal and monetary policy hostage to exchange rate policy and inflation policy. In fact, this is the case for economic policy as a whole. The authorities have seen further erosion of their already limited economic room to manoeuvre. Of course this is also the case for the countries with fixed regimes; but again this is a matter of degree. The question of freeing intra-regional capital movement therefore leads to the question of what kind of exchange regime is appropriate to the CARICOM Single Economy.

Regarding business enterprises, legal restrictions have in theory been removed, but private sector spokespersons complain noisily about administrative and informal restrictions on the setting up of businesses in several countries. For example, Jamaican businesspersons complain about informal barriers in Trinidad and everybody complains about Barbados. There is a still a perception that government agencies are more receptive to extra-regional investors than to our own people, a hang-over from the days of Industrialisation by Invitation, no doubt. Such formation of Pan—Caribbean firms as has taken place such as Grace Kennedy, RBTI and the like is said not to have been due to the removal of restrictions but to the normal processes of cross-border investment (although it might be the case that these firms are positioning themselves in anticipation of the completion of the CSME).

Completion of the Single Economy

I do not want to sound unduly pessimistic but there is no point in pretending that the work to be done on the completion of the Single Economy will be easy, or simply a matter of political will. For example, the Financial Services Agreement and the Investment Agreement, which are meant to create a single financial and investment space, exist in draft form but are not yet in effect. There is still no agreement on the regional stock exchange. No progress has been made on the harmonisation of fiscal, monetary and exchange policies or the proposed monetary union. Technical work on the harmonisation of company taxation, company law, and the like is still in its infancy. Common policies and support measures for productive activity/production integration have yet to be identified. All these things are required to create the single economic space.

In my report on the Single Economy I proposed 2015 as the target date for all these things to he done, and the CSME completed, and this was approved by the Heads. The cynic would say, however, that it is easy for governments to agree to a target date that is both non-binding, and beyond the term of office of present administrations. A huge effort will be required to meet even this extended deadline. It seems unlikely that it can be met without incorporating a much greater degree of supranationality than presently exists in the CARICOM arrangements.

At the same time the question arises as to how much we can expect from an economic integration that relies primarily on market mechanisms, that is on Open Regionalism and a passive state. We have already seen where intraregional trade in goods is highly concentrated, with Trinidad and Tobago alone responsible for over 80 percent; and the other members, with the qualified exceptions Guyana and Barbados, export little to regional markets and have limited prospects to do so. When account is taken of service exports, the relative insignificance of the regional market to most member states is even more striking. To put it another way, CARICOM economies are marginal to CARICOM economies. It is even questionable how much of the growth of Trinidad and Tobago’s exports to the region is attributable to the existence of the Community. Two recent reports prepared by researchers at the 1DB have concluded that the expansion of intra-regional trade resulting from the CSM has been very small and is likely to remain small in the future¹.

Table 1 CARICOM intra-regional exports

Table 2 Share of CARICOM market in total exports, 2003

As far as allocative efficiency and attraction of foreign investment is concerned, the integrated regional economy will still be very small in international terms. Note that the aggregate population and Gross Domestic Product (GDP) of the CSME participating countries is less than that of Cuba or the Dominican Republic and about one-quarter that of Venezuela’s. The GDP of the Mercosur bloc is 58 times that of the CSME, North America Free Trade Agreement’s (NAFTA) economy is 394 times the CSME and the European Union is 277 times. Although the largest countries in these groupings are several times the size of CARICOM in terms of population and GDP, they have still found it necessary to become part of these larger groupings.

Table 3—Comparative size of regional groupings

Note also that apart from Trinidad and Tobago, manufacturing is insignificant in the CARICOM economies and it is this sector that is normally expected to be the chief beneficiary of integrated markets. In fact of the ten largest Pan—Caribbean firms only one is primarily engaged in manufacturing while four are primarily engaged in financial services. (It is possible to entertain ideas of firms like these becoming global financial powerhouses but I rather doubt it. The much more likely scenario is for the most successful to be acquired by global firms and this is already happening. The idea that off-shore financial centres in the Caribbean are actually exporting financial services in any way other than the semantic sense is, I would argue, mistaken.)

Note next that although the region continues to have vast agricultural potential that sector has been practically stagnant in the last two decades while regional food imports have sky-rocketed and there is no evidence of an impending rush of investment in agriculture to take advantage of the CSME. Finally note that the majority of CARICOM economies derive the bulk of their export earnings from services, especially tourism and this sector will not derive significant stimulus from the CSME in and of itself.

All these factors point to the necessity for